Non-Profit Corporation Legal Meaning and Definition

Here is a simplified definition of the legal term Non-Profit Corporation.

Non-Profit Corporation (noun)

A non-profit corporation refers to a legal entity established by state authorization, whose principal objective isn't to make a profit for shareholders. Instead, it primarily exists to serve a societal benefit, like education, healthcare, religious practices, or charitable activities. Income generated by these organizations is typically reinvested back into the mission of the organization itself. The directors or trustees are not meant to personally profit from the organization, although they may receive reasonable compensation for their services. Non-profit corporations often enjoy tax-exempt status, meaning they do not pay income tax on the money they receive.